Yahoo today said it would start informing 2,000 employees, about 14 percent of its workforce, that they were losing their jobs as the company tries to streamline its business and trim expenses, eventually saving some $375 million a year.
In a letter to employees, CEO Scott Thompson said the move would give Yahoo "the opportunity to compete and win in our core business." Thompson replaced ousted Yahoo CEO Carol Bartz in January.
Thompson said the company had, over the past two months, "fundamentally re-thought every part of our business, and we will continue to actively consider all options that allow Yahoo to put maximum effort where we can succeed."
Sources told the Wall Street Journal, meanwhile, that the cuts announced today may only be the start of larger reductions.
But Thompson said these cuts would make the company more nimble, profitable and better equipped to innovate.
He also said Yahoo needed to "focus to win in a select group of core businesses globally," including making the company's content, media and communications "best in class."
"That includes getting today's core properties right and innovating on a next generation of great product experiences across all screens," he said. Thompson also said Yahoo would make its core platforms and systems stronger, allowing it to support Yahoo's massive scale, "drive the deepest personalization and boost speed to market." Yahoo also would seek to make its data sets "a genuine competitive advantage."
"We have to unlock the value in our data to allow us to really understand our 700 million users, encourage and win their engagement and trust, leverage everything they do with us to more fully personalize their experiences and to give our advertisers the immediate insights they are rightfully demanding," he said.
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